Tuesday, June 18, 2013

I find myself considering the reason why I am not married. Is it because of a shortage of common interests? Poor social skills? My complete lack of effort? Are my unreasonably high expectations to blame? Or is it Cotton-eye Joe? There is, perhaps, some merit to all of these reasons. Any one of them could be sufficient to explain why I didn't get married a long time ago.

But there is yet another reason to consider: I heard a legend on the Internet that if you stay a virgin until you're 30, you become a wizard! So I played hard to want. Now I'm 31, and you can imagine my surprise.

I've seen this image floating around Facebook, and it bothers me. Not because it paints Obama in a bad light, but because it uses bad arguments to do it. When you make an argument, people assume that's the best you've got, so something like this is counterproductive if you want to make Obama look bad. The facts are more than enough to do that, so I'll be fact checking and correcting this. A lot of this data is, at best, a couple of years out of date. Some of it is the wrong data to use to make the point in the first place, and I also don't care for including early 2009 as part of "Obama's economic record" simply because we wouldn't have enough time for his policies to take effect in any case. In short, this graphic paints a picture of decline, when the reality is not decline, but rather stagnation and mediocrity.

Unemployed Americans

The first thing on the list is the number of unemployed Americans. We started with about 12.2 million, and today we're down to about 11.7 million. We passed 14 million in the first half of 2009, and dropped below 14 million around the beginning of 2011. We were down to about 11.7 million as of May 2013. Before the crash, we were at about 7 million. I'll provide data starting in 2007 for context's sake.

This looks like an improvement, but it's important to remember that people who give up on looking for work are no longer counted as unemployed. The other problem with this is that it uses absolute numbers, rather than a percentage of the total population. Our population is growing, so we could have more unemployed people even if the unemployment rate is going down, so the comparison is going to be inaccurate simply due to changes in the size of the population. The most charitable interpretation of this data is simply that they are using statistics from 2009-2011, which covers less than half of Obama's presidency. Time to update your data, guys.

Unemployment Rate

Next up we've got the unemployment rate. Starting at 7.8% and going to 9.1%, it's looking more like the original graphic is was made using data from early 2011. The unemployment rate was 7.6% as of May 2013.

This is a better statistic to use than simply the number of unemployed since it accounts for changes in population, but even within the limited time frame covered it does not account for people who gave up on looking for work. There are substantial numbers of these people, so the unemployment rate is going to understate the magnitude of the problem. What we should be looking at is the civilian employment to population ratio, which is just a ratio between the number of working age Americans and the number of Americans who have jobs.

As you can see, this started around 63% in 2007 and tanked to about 58.5% between 2008 and 2010, and it's been stuck there ever since. I think that this data gives us the most accurate picture of the employment situation. It's not getting better, but it's not getting worse; crappy is the new normal. Naturally, the Democrats ignore this one in favor of the unemployment rate (which goes down as people give up) and the Republicans play games by counting "underemployed" workers and adding those totals to the unemployed and discouraged workers to get made up but impressive sounding metrics like the "Real Unemployment Rate," which ironically is not a real metric tracked by economists in general.

Gas Prices

Since when is the price of gas the President's responsibility? It makes no sense to include the price of gas as part of Obama's economic record, because oil is a commodity. It is fungible. It is globally traded, and we buy most of ours from other countries. While Obama's environmental policies on oil development in the United States do have an impact, the price of oil is only influenced by this to the extent that US production affects the global supply. The impact of US oil development on gas prices when compared to the influence of global market conditions is basically irrelevant. Policies like mandatory ethanol additives also have an impact, but again it makes no sense to try to judge Obama by the price of a gallon of gas when most of that is completely beyond his responsibility or ability to control. If he did increase US production, OPEC could just cut back theirs to maintain the current price.

Federal Debt

To start with, the nominal amount of the debt doesn't matter; what matters is how large the debt is as a percentage of GDP. It's been on the rise in a huge way, but this started in earnest back in 2007 when the Democrats took control of Congress, not when Obama took office. That makes it harder to pin the blame on Obama, but the reality is that Bush was extremely fiscally irresponsible as well. Obama has basically just doubled down on Bush's bad fiscal policies.

However, going from $10.6 trillion to $14.7 trillion lets us look at the exact time frame used for this data. We hit $10.6 trillion in Q4 of 2008 and $14.7 around Q3 of 2011. This one looks to be intellectually dishonest instead of just outdated, since it's counting from several months before Obama took office. The fact that it includes data from the latter half of 2011 when the previous data about unemployment stops at the beginning of 2011 makes it look like data is being cherry picked to make it look more impressive. Do not do this. There is a circle in Economist Hell specifically for people who cherry pick data.

This is infuriating, because they are doing something intellectually dishonest and thereby discrediting their own position when the truth is more than sufficient to make the point. The St. Louis Fed only has data available through January of 2013, so the data series ends there.

The federal debt has increased significantly in the last six years, going from $8.8 trillion to $16.8 trillion. When Obama took office it was about $11.2 trillion. But, like I said before, we should be looking at the debt as a percentage of GDP, because that reflects our ability to pay it off. First we get some historical perspective and then look a little closer, comparing Bush and Obama.

If we look back a little further using data from the Congressional Budget Office, we can see that the federal debt as a percentage of GDP peaked at about 112% in 1945. WW2 was expensive and was financed largely through war bonds. This debt dropped off quickly, and was down to less than 50% of GDP by 1960, and reached about 25% by the mid 1970s.

When the Republicans held Congress for six years between 2001 and 2007, the debt increased by less than 8%. When the Democrats took the House and Senate in 2007, over the next two years the debt increased by 15%. Obama took office in 2009, and over the two years that followed the debt increased by another 16%. In the last two years from 2011 to 2013, the debt has increased by another 9%. We're currently looking at a debt to GDP ratio of about 105%, and we're rapidly approaching our previous WW2 high.

While it is true that deficits are larger during recessions (the latest of which officially ended in 2009, by the way), we can look at past recessions for comparison. The Great Depression was a lot worse than the more recent housing crash and financial crisis, and when combined with the New Deal it added to the debt by about 30% of GDP. That is how the Republicans should be explaining the debt situation, not making intellectually dishonest comparisons between late 2008 and mid 2011.

Debt Per Person

When you are looking at a single point in time, this can help people get their minds around the very large number that is the national debt. It doesn't work well for comparisons to a past point in time, because it doesn't count inflation, which makes the difference appear larger than it really is. Debt as a percentage of GDP covers this. The decision to use debt per person rather than debt as a percentage of GDP is a misleading gimmick.

Misery Index

How many people even know what the Misery Index is? It's the unemployment rate (which has problems, as I've discussed) plus the inflation rate, with both of them evenly weighted. There's not much point to citing this to people who don't know what it is, but it sounds bad, so that's why it gets a spot. The inflation rate is largely the Federal Reserve's responsibility anyway; the government controls fiscal policy, while the Fed handles monetary policy. If you're going to blame somebody for the inflation rate, blame Ben Bernanke. He was appointed as chairman of the Fed by Bush and then renominated by Obama. His performance in that capacity is exactly as everyone predicted: throw money at the economy until the unemployment rate goes down.

Food Stamp Recipients

Finally, something that doesn't look blatantly wrong. I had to actually look up the data myself to find out that yes, this is more intellectually dishonest BS. The Census showed 32,889,000 people on food stamps (SNAP) in January 2009, which the graphic reports as 32 million. Guys, you can't just truncate remainders like this. Either report the more accurate fraction of a million or at the very least round it to the nearest integer; don't just truncate 32.9 down to 32 to make it look worse than it is. The 45 million on food stamps is accurate for mid 2011. We're up to about 47.7 million by now, according to SNAP themselves. Again, the main point that they are trying to get across is solid, but they undermine their own position by intellectual dishonesty when there really isn't any point in doing so.

Health Insurance Premiums

Like with gas prices, this isn't the President's job. The President does not set the price of insurance policies. While requiring people to buy insurance will cause an increase in the cost of insurance, all other things being equal, that does not mean that the price of insurance in early 2009 should be directly compared to whenever it was that they found this other number.

Home Values

This is more stuff that isn't the President's job. Trying to get everybody into a house whether they could afford one or not is what got us into this mess in the first place. Lower prices are good for home buyers, and higher prices are good for home sellers. Saying that a shift in prices is universally good or bad is just stupid.

US Global Competitiveness

There are a lot of different measures for this sort of thing. Why choose this one? Why not the Index of Economic Freedom, or the Economic Freedom of the World report? The Economic Freedom of the World report shows the US dropping from 2nd place to 8th place between 2000 and 2005, and down to 18th place by 2010.

While this is not intellectually dishonest per se, it's still a weak argument because one could just as easily pick a different report to get rankings that favor their argument. There is no "gold standard" for this sort of thing; multiple rankings exist, and they are all calculated differently.

Americans in Poverty

Comparing poverty statistics is another thing that bothers me, because the definition of poverty changes over time, and there are often multiple definitions in use at once. Are these absolute poverty statistics, or measures of relative expenditure? Sometimes poverty is three times the cost of a nutritionally adequate diet, and other times it is simply an arbitrarily selected percentage of the median income. Some measures of poverty include government transfer payments (food stamps, welfare, etc) and others do not. If you're going to talk about poverty, you need to devote some space to explaining what exactly you are saying, rather than just throwing out numbers like this.

Conclusion

None of this stuff is sourced or dated, and all of the dates I found were done by just backtracking into various time series to figure out when the data would have been accurate, and that could be wrong if the numbers in the graphic were being stretched in the first place. The information that isn't outdated is either exaggerated by the way it is presented, or irrelevant. Obama's poor showing is better criticized by not resorting to intellectually dishonest tactics; the truth about the debt, the dramatically increasing numbers of people on government support, and the poor employment to population ratio is more than enough to condemn him.